Development costs and subsidies for irrigation in India

Canal irrigation and tubewells, along with high yield varieties (HYV) seeds, became the catalysts of growth in Indian agriculture. A number of studies have highlighted the role of irrigation in enhancing India"s food-grain production, but at what cost this has been achieved remains much less explored. Although controversy recently has started on the cost aspect of major and medium vis-a-vis minor (groundwater) irrigation works, there has been little attempt by the participants in the debate so far to carefully work out estimates of the capital costs of irrigation schemes. This controversy, however, has brought in focus the complexities involved in properly estimating the costs of irrigation. This study attempts to grapple with some of these complexities in an endeavor to assess the capital costs of irrigation. More precisely, this study proposes to estimate: (a) the capital cost of major and medium irrigation schemes of India on per hectare basis of potential created and potential utilized; (b) the subsidy to Indian agriculture for major and medium irrigation schemes; and (c) the subsidy provided to groundwater irrigation schemes in the form of lower power tariffs. In what follows, we discuss each one of these in greater detail and try to obtain reasonable estimates of development cost of irrigation and subsidies therein. Finally, based on the range of these estimates derived through alternative exercises, some concluding observations are presented. (Author abstract)